After a pretty volatile few weeks for stock markets around the world, the FTSE 250 is now trading slightly down for the year to date. As disappointing as this is, it’s nothing compared to the shockingly poor performance of some of its members.
Today, I’m looking at one heavy faller in particular and asking whether it now presents as a potentially canny contrarian buy.
Big loser
The stock in question is online travel platform and ticket seller Trainline (LSE: TRN). Despite enjoying a significant jump in price towards the end of 2024, the mid-cap’s value has plunged over 30% in 2025, so far.
That might seem odd based on the company’s most recent trading statement. Back on 13 March, Trainline revealed an 11% year-on-year rise in revenue to £442m. Total net ticket sales also climbed 12% to £5.9bn.
The trouble was that both numbers were lower than some analysts were expecting and the market was in an unforgiving mood.
Is the sell-off overdone?
Now, such a significant tumble in the share price is bound to get value hunters sniffing around. And I can see why many might be attracted to Trainline.
Sure, the aforementioned figures failed to impress on the day. But they did fall within the company’s previously upgraded guidance range. So does the recent news flow warrant such a steep decline?
This is before we’ve even considered the strong possibility that digital tickets are only likely to become increasingly popular going forward. With 18 million customers already, the firm’s ongoing expansion into Europe could also help the shares recover in time.
There’s another thing I’ve noticed.
While there’s some interest in the stock from short sellers — those betting the share price has further to fall — this is fairly insignificant compared to other FTSE 250 stocks such as online grocer Ocado and pizza delivery firm Domino’s Pizza. Put another way, it doesn’t seem most traders have serious concerns about the earnings outlook.
But could this be set to change?
Increased competition
A lingering concern is what impact a state-backed ticketing platform (run by the proposed ‘Great British Railways’ governing body) will have on Trainline’s revenue in the UK. As things stand, nothing’s expected to be introduced until the end of 2026 at the earliest. However, investors might not be willing to wait around to find out.
The company’s aforementioned growth plans could also come a cropper if the travel industry encounters headwinds, even just as a result of reduced consumer spending. Another extreme event like a pandemic? I really hope not. It can’t be ruled out though.
At 14 times forecast FY26 earnings, the stock isn’t all that cheap relative to the Consumer Cyclicals sector or the wider UK market either. However, I do accept that it’s a lot lower than it once was.
One last thing to be aware of is the lack of dividends. Sure, this is to be expected from a growth-focused company. Even so, it does mean that investors won’t be compensated if the stock moves sideways from here, or continues falling.
All things considered, Trainline’s an interesting investment proposition. But I’m not sure it can be considered an unmissable bargain.
I’m happy to sit this one out.
